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How to Budget for Fluctuating Bills

When you put together your budget, you set aside categories for all your expenses.

Most bills, like your mortgage or loan payments, are set at a certain amount each month. You know exactly how much you’re going to pay each month no matter what. There are others, however, that depending on things like the weather or simply how much you use, tend to fluctuate each month.

It’s difficult to know how much to budget for with fluctuating bills, and if you’re on a tight budget, trying to budget for the correct amount can leave you frustrated. Instead of giving up, here are three ways you can budget for fluctuating bills.

1. Borrow from Other Categories

Depending on the category and your budget’s flexibility, you might be able to simply shift money around to accommodate for a fluctuating bill.

If you’re bill is a little over one month, try borrowing from an entertainment category or shifting a little from multiple categories. Of course, if your bill is quite a bit higher, think up to $100 or $200, this might not be the best suggestion. It could end up taking too much from other categories that need it.

2. Average Your Bills

If you’re really trying to stick to a budget and have lived somewhere for at least a year, then averaging your bills together can be a great way to budget for utilities.

Add up your bills for a certain utility from the past year and divide by twelve, that’s the amount you should budget each month for that expense. That way, when a month comes in a little lower, you simply leave the surplus in that expenses category and put it towards month, when the bill may be higher.

Moreover, depending on how much your bill fluctuates, you could budget for the highest possible bill, and if the bill costs less, put extra income towards a financial goal.

3. Set Up a Budgeting Plan

Many utility companies, like your electric company, offer budget billing plans to assist you in budgeting for said expenses.

Similar to the average approach, your utility company will also take the average cost of the year’s bills and charge you that set amount each month. This is a great solution in the moment. You’ll know exactly how much to account for each month.

However, you will ultimately have to pay the difference at the end of the year. While this might not be a big deal, it could end up being fairly expensive and catch you off guard. Moreover, if you use less, some companies won’t refund or credit you. That being said, you might want to see how much your bills fluctuate before opting for this solution.

Sticking to a budget is difficult enough without accounting for fluctuating expenses. Trying to budget for a number that you simply don’t know only stands to leave you frustrated. Thankfully there are ways to combat fluctuating bills. Try one of these easy solutions, and you’ll find yourself prepared no matter the number at the end of your bill.

Have you tried budget billing? What have you found that works for you when it comes to fluctuating bills?